PETALING JAYA: Aeon Co (M) Bhd will continue to focus on rejuvenating its existing malls and sales recovery for the financial year 2022 (FY22).

       After its recent meeting with the group, MIDF Research has expressed its optimism on Aeon’s outlook moving forward.

       This is premised on the general merchandise stores cum supermarket chain operator’s cost structuring strategies to improve its bottom line and maintain the prices of items and the personalisation of customer experience.

       On the rejuvenation of its current malls, the group started with the Aeon Mall Alpha Angle in Wangsa Maju in FY21.

       MIDF Research pointed out that the group expects to rejuvenate three to five malls on an annual basis adopting the i.d.e.a. (inclusive, digital, experiential Aeon) concept with an integration of online and offline tenants until FY25. “This plan is in line with Aeon’s mission to improve its mall and tenant mix which would potentially result in an occupancy rate of over 92% by end FY23.

       “As such, currently there are no plans for new malls and the group will focus on the rejuvenation of its existing malls,” added MIDF Research.

       The research house said: “Cognisant of the challenging business environment, the group has shared a restructuring of tenancy income for FY22, where fixed rental will be reduced while the commission-based fee will be higher.”

       MIDF Research opined that this would be positive for the group, where the expected increase in footfalls in the malls coupled with the reopening of international borders will contribute meaningfully to the group’s property management revenue segment through better commission fees from the tenants.

       The research house is also positive on myAEON2go, which targets same day delivery within three hours.

       It noted that the revenue of myAEON2go for FY21 increased manifold to RM24mil.

       “While this is insignificant compared with the total revenue of RM3.6bil, the group is projecting growth from this segment by around two times in FY22 as it pivots to an online merge offline business model in line with the changing consumer shopping trends and uncertainty in footfalls,” noted MIDF Research.

       For now, the research house made no changes to the group’s earnings estimates.

       But it expects AEON’s prospects to improve from FY22 onwards in line with the reopening of businesses and social activities.